The Other Red Meat: U.S. Operation That Backgrounds Holstein Steers Has Grown Internationally

About 15% of total U.S. beef production comes from dairy beef. In many other countries, it's higher. And in Morocco and now China, that trend will grow, thanks to international cooperation from Stoney Point feedyard, an American company that has found a profitable niche in the U.S. beef market and beyond.

Ask nearly any kid in nearly any elementary school to draw a cow, and what do you get?

A Holstein.

With a nod to Chick-fil-A for that circumstance, the fact remains that about 15% of total U.S. beef production comes from dairy beef. In many other countries, it's higher. And in Morocco and now China, that trend will grow, thanks to international cooperation from Stoney Point feedyard, an American company that has found a profitable niche in the U.S. beef market and beyond.

In the beginning

Stoney Point feedyard, just northeast of Dallas, TX near the small town of Melissa, was originally built as a beef-finishing facility. “But it's way out of position for weather and especially the market,” says Clark Willingham. He partners with veterinarian Mark Quinn in Stoney Point Agri-Corp, which owns the 8,000-head feedyard and a three-acre turf-grass operation that recycles the feedyard's manure and runoff.

So when Quinn and Willingham bought the feedyard back in the '80s, they changed it to a background facility, growing heifers for dairies in the Dallas area and starting Holstein steers that they contracted to feedyards as 450- to 500-lb. feeders. And working with their consulting nutritionist, Dave Hutcheson, they do it with a ration consisting almost exclusively of byproducts.

They began by collecting out-of-date milk and yogurt from Dallas-area stores and feeding it along with roughage to the heifers. They also use bakery and snack-chip waste, in addition to more common cotton byproducts. It's a backgrounding ration, Willingham says, but it's very cost-effective.

The international connection

Their success in filling a niche in the U.S. market got noticed by the U.S. Grains Council, which was trying to increase U.S. corn exports to Morocco. Dairy production is the principal animal agriculture in that country, says Sara Sellers, the Stoney Point sparkplug who works on their international efforts, and the U.S. Grains Council asked if they would help the Moroccans build and run an operation to grow dairy heifers and feed dairy steers. So, in 2003, four Moroccans came to Texas to learn, and what they saw was their future.

The size of the average dairy in Morocco is eight head, Sellers says, so to look out at a facility that holds 8,000 was an awakening, not just to the possibilities that economies of scale can bring to efficient production, but to the realization by the Moroccans that they needed more than just a few weeks of training.

“So they asked if we would be willing to send some employees over there to spend a year or two doing startup procedures,” Sellers says. “I got selected, probably because I was the only one willing to travel.” She moved to Morocco in January 2004 and has been an integral part of its operation ever since.

The feedyard is owned by an agricultural cooperative in Morocco called COPAG, Willingham says. Stoney Point Agri-Corp and Sellers, now managing director of her own consulting company, provide the expertise.

It hasn't been easy. The barriers of culture, distance and technology have challenged the effort. But Sellers says the team she works with from the cooperative is very dedicated to the project's success. “They've overcome a lot of challenges in their culture and their country to make sure the feedlot keeps going.”

One of the many cultural challenges they face is an aversion to castration. “The feedlot was built for steers,” she says, with 80-head pens. Despite numerous warnings from Sellers and Quinn, the Moroccans wanted to feed bulls. “It's ugly, with a lot of fighting, and it's dangerous for the employees.”

But you can't change everything at once, she says. So, slowly, the concept of castrating is being accepted. The finished cattle are either sold to local, open-air markets or to a grocery store chain.

“We convinced them to castrate a pen, and one of the grocery stores came to the feedlot and looked at the difference between the bulls and steers,” Sellers says. The store's buyer liked the look of the steers and, breaking free of cultural norms, bought a few. “And they really preferred the steers.”

So now, when the feedlot gets a contract to supply the grocery chain, they castrate and feed steers. The rest of the cattle are kept intact and sold 3-5 head at a time to local markets.

Just slightly larger than California, Morocco is in North Africa, just across the Strait of Gibraltar from Spain. “There's not much land, and a lot of it is the Sahara desert and the Atlas Mountains,” she says. In fact, only 19% of Morocco is said to be arable, with only 2% dedicated to permanent crops.

Transportation is a major hurdle. There's no U.S.-style trucking, not even a gooseneck trailer. And the only packing plant of any size is in Casa Blanca, which, as Sellers says, is a mountainous headache to get to. Because of the transportation hurdles, the cooperative sells the cattle live and the buyers must transport and slaughter the bulls and steers they buy from the cooperative's feedyard.

COPAG enjoys a strong reputation in Morocco for its other products, such as milk and fruit juice, and retailers are anxious to buy cattle from the feedyard so they can advertise it as COPAG beef. Because the co-op doesn't own a slaughter facility, it isn't producing a line of branded beef.

“But (for the retailer) to be able to call it ‘COPAG beef’ or ‘a product of COPAG’ is a real big selling point,” Sellers says. “So they come from all over to get it.”

Unlike the business model that's made Stoney Point feedyard so successful in the U.S., there aren't many byproducts available in Morocco. So the cattle are fed a more conventional ration of steam-flaked corn, alfalfa and a pelleted supplement produced by the co-op's feedmill.

The China connection

The group's success in Morocco and their Holstein-growing experience in Texas led a U.S. company called Western Cattle Company, which was looking to establish a presence in China, to ask them for assistance. They started by training the Chinese managers in Texas at Stoney Point feedyard and in their calf ranch in Roswell, NM. Beginning in October 2006 and extending through part of 2007, Sellers spent about six months in China, helping secure a supply chain of dairy bull calves and training the Chinese workers.

The feedyard is located in northern China, in a province called Inner Mongolia. About 30 miles from Mongolia and near the Gobi desert, it's a harsh and unforgiving climate. “We're actually in a facility that was used for Holstein embryo transfer,” Sellers says. “But it has a really big barn. And in Inner Mongolia, you need a lot of indoor space because the winters are so nasty.”

The facility can hold upwards of 5,000 Holstein steers, which are slaughtered at a nearby packing plant. The cattle are raised in a U.S.-type production environment, with source and age verification and complete trace-back capability on every animal. That's necessary as they begin to develop markets for their beef, as some U.S. retailers that have a presence in China require it.

Unlike Morocco, however, where they're acting as consultants, Stoney Point has a “sweat equity” ownership in Western Beef Company, Willingham says, and they continue to look for other possible joint ventures of this type in China. These are difficult negotiations, he says, since the Chinese tend to learn from you and then want to take over.

In the interim, Willingham sees the potential to profit from sharing their expertise. He and Sellers are aware they may be criticized by some in the U.S. beef industry for exporting their knowledge rather than their beef, but don't think they'll be a major competitor for exports to China once the nation lifts its ban on U.S. beef.

“Number one, there's well over a billion customers,” says Willingham, who served as National Cattlemen's Beef Association president in 1998. “There's no way we could negatively affect what we're going to ship there in the next 50 years. But from a longer-term, big picture, I guess it's what American agriculture has always done. We've tried to teach the rest of the world how to feed itself. And I think that's still what we're about.”

To that, Sellers adds that the long-term benefits of their overseas involvement may be positive for exports. “To me, it's about feeding the world and teaching the world, and taking what many people see as your disadvantage of being an American and turning that into a positive.”

In Sellers' mind, everything that goes around comes around. “When you go to other countries and they see you're out there trying to help them produce the food they need, it really, really changes their perspective. It shows them there's more to America than just Hollywood.”

A woman's touch

Among the cultural concerns that Clark Willingham and Mark Quinn, owners of Stoney Point Agri-Corp, had in helping establish a feedyard in Morocco was sending Sara Sellers to a country that practices the male-dominated Muslim religion.

“I was worried when we sent her there, because a cute blonde in a Muslim culture just personally scared me,” Willingham says.

Sellers was unfazed. “I think it worked to my advantage,” she says.

Her presence was completely counter to Moroccan cultural norms. She was 23 when she went to Morocco, which to them is still a child. She was a woman and an American. But the COPAG staff were very supportive of her efforts, and she has a steel-edged determination to succeed and an infectious personality that is irrepressibly outgoing.

“People expected me to fail because I was a woman and because I was young,” she says. So she approached the challenge by letting them know that she understood and respected their culture. “And that earns you a lot of points.”

She says they purposely didn't dress her in a burqa and veil because they were afraid the more they made her look like a Moroccan woman, the more she would be treated like a Moroccan woman.

So, in her western dress of jeans, boots and a button-down shirt, with a baseball cap for a veil, she struck out to win over the 900-some dairy farmers who belong to the COPAG cooperative. “And they were more receptive of it because they thought ‘she's coming as who she is.’ So I think it was dual respect. I gave them as much respect as I could and they returned that respect to me,” Sellers says.

Another aspect of her presence in Morocco was helping women take part in the project. The co-op offers internships to ag students at a Moroccan university.

“Once the university figured out an American woman was working there, they felt a little more comfortable sending women. Being a part of that, being able to help even one woman get a better education who might not have had it, especially in agriculture, to me blows any other challenge out of the water,” she says.
— Burt Rutherford